Humber/Ontario Real Estate Course 1 Exam Practice

What is true about a land lease?

1. Can be used for residential developments but not for agriculture

2. Is exclusive to use by individuals but not businesses

3. Cannot be issued by private property owners

4. Cannot exceed 20 years in duration

5. Provides exclusive right to use the leased land

6. Is prohibited by the Crown

The correct answer is: Cannot exceed 20 years in duration

The correct answer is D. A land lease cannot exceed 20 years in duration. This is a key characteristic of a land lease agreement in Ontario. In Ontario, a lease for a term exceeding 21 years must be registered to be enforceable against third parties. This restriction is in place to ensure that longer-term agreements are properly documented and registered, providing clarity and protection for all parties involved in the land lease arrangement. Options A, B, C, E, and F are incorrect because: A. Land leases can be used for various purposes, including residential, commercial, industrial, or agricultural developments. There are no restrictions on the type of development that can be undertaken on land leased through a land lease agreement. B. Land leases can be used by both individuals and businesses. There is no exclusivity requirement regarding the type of entity that can enter into a land lease agreement. C. Private property owners can issue land leases, and it is a common practice in real estate transactions. Private property owners can choose to lease out their land for specific purposes and durations according to their preferences. E. A land lease provides the lessee with the right to use the land for a specified period, but it does not grant exclusive ownership rights to the leased land